Four Things to Know Before the IRS Tax Filing Deadline

As April 15 looms, taxpayers across the nation are gearing up for the annual ritual of filing their federal income taxes. However, if you’re in Maine or Massachusetts, you’ve got a couple more days to breathe easy, as the Patriots’ Day holiday grants extensions until April 17.

But whether you’re in the two-day extension zone or the April 15 crunch, there are crucial considerations to remember. Firstly, don’t forget the power of last-minute contributions to your Retirement Accounts (IRAs) and Health Savings Accounts (HSAs). Even though 2023 is in the rearview mirror, the IRS allows contributions until midnight on tax filing day. These contributions can reduce your taxable income, potentially lowering your tax bill while helping you maximize your yearly contribution limits.

However, amidst the rush, beware of misinformation on social media platforms. Not all advice is created equal, and attempting to claim obscure credits based on dubious TikTok videos could land you in hot water with the IRS, facing charges of refund fraud.

Speaking of refunds, while the average refund this year is higher than last year, fewer taxpayers are actually receiving them. The gig economy boom, increased capital gains from investments, and changes in tax withholding laws mean more people may owe taxes or receive smaller refunds. This shift pressures individuals to manage their finances carefully and plan for tax liabilities associated with side hustles and investments.

And what if you find yourself unable to file on time? Remember, filing for an extension is far preferable to facing penalties for late filing or late payment. Additionally, the IRS offers payment plans for those who need more time to settle their tax bill, helping taxpayers avoid hefty fines and interest charges………….[read more]

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How do changes in tax laws and the rise of the gig economy impact individuals’ financial planning strategies, especially concerning tax liabilities and refund expectations?

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Alex N

7 months ago

Changing tax laws like extensions to tax payments in Maine and Massachusetts, gives peace of mind to some taxpayers as they have more time to pay off their taxes. On the other hand, the rise of the gig economy will still require freelancers to pay taxes. However, it may be harder since they will have to learn how to file taxes.